Britain’s third largest steelworks are placed under government control, which creates an uncertain future for about 1,500 workers in Roderham and Sheffield.
The Insolvency Courts ordered an essential order that a millions of pounds sought sought by the creditors, which is part of the controversial tycoon Sanjeev Gupta of the Millions of Pounds – Liberty Steel Metals Empire by Specialty Steels UK (SSUK).
The company will now be placed in the hands of the official receiver and special managers of the consultancy firm Taneo, which has been appointed by the liquidator to run it.
The government has agreed to cover the plant’s ongoing wages and costs, while a buyer has been sought.
Liberty Steel said that the decision to keep the firm in mandatory liquidity was “irrational”.
Chief Transformation Officer Jeffrey Kabel said the step “despite the availability of a commercial solution, will implement prolonged uncertainty and significant costs on the UK taxpayers for settlements and related expenses”.
Mr. Gupta’s lawyers applied for a four-week adjournment to allow the company to keep the time in the “pre-pack administration”, which allows a bankrupt company to sell their assets to a bidder.
He wanted to fund the investment giant Blackrock and Fidera that invests in crisible companies, to buy business back.
While curbing the company, their lawyers argued, placed the business in a “free fall”, and a national important steel company and its 1,500 workers can cause significant disruption, cost and risk.
The judge found that the company bank had “disappointing bankrupt” with £ 600,000, a monthly salary bill £ 3.7m, supported by a original group, with 15 institutions in nine courts.
One of the creditors, Ryan Perkins for Grinsil Capital argued that UK Steel-Making would be given better service if the company’s assets were sold with the help of independent special managers working on behalf of the government, as it allows the administrators appointed by Mr. Gupta to conduct the process.
At a separate court hearing on Wednesday, Mr. Perkins presented a letter from the department for trade and trade in which the government was contacted by the third party.
The court heard that he had “interested in returning some or all sites in steel-making”, which was “the will of the government”.
The letter states that “a systematic mandatory liquidation may be a way to resume steel production”.
